Photo by Michelle Spollen on Unsplash

The Canadian Dollar (CAD) soared 1.1% against the US Dollar (USD) on Thursday, sending USD/CAD to 17-week lows near the 1.4000 handle for the first time since last December. The Loonie has been bolstered by a rapidly weakening Greenback, which is tumbling on the heels of the Trump administration’s “Liberation Day” tariff unveiling.

In normal times, the US Dollar tends to behave like a global safe haven, with investors scrambling to pile into Greenback holdings when things look unsteady. However, these are not normal times. The US Dollar is getting hammered by the Trump administration’s latest tariffs, which are set for a tiered but rapid kick-in period.

Daily digest market movers: Canadian Dollar soars on plummeting Greenback

• The Canadian Dollar gained over a full percent on Thursday, hitting multi-month highs and putting the Loonie on pace to close higher against the Greenback for a fifth straight week.
• The Trump administration is set to implement an across-the-board 10% tariff on all goods imported into the US from April 5. “Reciprocal tariffs”, which were calculated as a ratio of US imports against exports on a per-country basis, are due to begin April 9.
• Canada and Mexico have both earned a reprieve from additional tariffs, as long as they stay within the USMCA (nee NAFTA) trade restrictions. Canada has fired back with its own potential tariffs if US trade falls outside of its own USMCA limits.
• Federal Reserve (Fed) policymakers have been working double duty cautioning that tariffs could be bad for rate cut expectations.
  • Fed's Jefferson warns Fed is not in a rush to change rates
  • Fed's Cook expects inflation progress to stall after tariffs
• US Nonfarm Payrolls (NFP) figures are still due on Friday, ready to be greeted by already-exhausted markets.

Canadian Dollar price forecast

The Canadian Dollar is poised for its fifth straight weekly gain against the US Dollar. USD/CAD has backslid 3.55% peak-to-trough since the last week of February, and the pair remains down 4.73% from multi-decade peaks from late January.

The Loonie’s latest bull run has pushed USD/CAD down to the 200-day Exponential Moving Average (EMA) near 1.4070, and CAD bulls could be poised for another leg down to the 1.4000 major handle.

(Click on image to enlarge)

USD/CAD daily chart 

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